Plans For Rite Aid Closings in 2022

Joel Eisenberg

The perennial drugstore chain has been shuttering 145 “unprofitable” locations throughout the current calendar year.

https://img.particlenews.com/image.php?url=4QIe4o_0grZwcqF00
Rite AidShutterstock

Author’s Note

This article is based on corporate postings and accredited media reports. Linked information within this article is attributed to the following outlets: Wikipedia.org, ScrapeHero.com, Forbes.com, Fortune.com, and Investors.RiteAid.com.

Introduction

Wikipedia features a comprehensive overview of the Rite Aid chain, which was founded in September of 1962: Rite Aid Corporation is an American drugstore chain based in Philadelphia, Pennsylvania. It was founded in 1962 in Scranton, Pennsylvania, by Alex Grass under the name Thrift D Discount Center. The company ranked No. 150 in the 2020 Fortune 500 list of the largest United States corporations by total revenue. Rite Aid began in 1962, opening its first store in Scranton, Pennsylvania: it was called Thrift D Discount Center. After several years of growth, Rite Aid adopted its current name and debuted as a public company in 1968. Rite Aid is publicly traded on the New York Stock Exchange under the symbol RAD.

According to ScrapeHero.com: There are 2,289 Rite Aid locations in the United States as of July 17, 2022. The state with the most number of Rite Aid locations in the U.S. is Pennsylvania, with 494 locations, which is 21% of all Rite Aid locations in America.

In recent years, however, Rite Aid has reviewed substantive business challenges that have necessitated the permanent closures of underperforming locations.

Let us explore further.

Rite-Aid, 2022

Not unlike similar companies, the pandemic took a toll on the perennial drugstore chain, though recent financial metrics have been strong.

Per Investors.RiteAid.com, in its piece entitled “Rite Aid Corporation Reports Strong Fiscal 2022 Fourth Quarter and Full Year Results and Provides Fiscal 2023 Outlook,” those reported metrics are cause for company-wide optimism.

As excerpted from the article:

  • Full Year Revenues Increased $525 million to $24.6 billion; Pharmacy Sales Increased 12%
  • Full Year Net Loss per Share Increased from $1.87 to $9.96 Driven by Non-Cash Impairment Charges
  • Full Year Adjusted EBITDA Increased 16% to $505.9 million Driven by Strong Retail Pharmacy Performance
  • Generated $379 million in Operating Cash Flow and Reduced Net Debt by $212 million
  • Leverage Ratio Improved Year Over Year from 6.7 to 5.4 Times
  • Issues Fiscal 2023 Adjusted EBITDA Outlook in Range of $460 million to $500 million – Announces Cost Rationalization Program that Targets $170 million in Savings

The numbers are strong across the board.

According to an April, 2022 article from Forbes.com, “Rite Aid to Close 145 ‘Unprofitable Stores,” ‘ongoing cost-cutting moves designed to help the pharmacy chain be more competitive’ has been reported as the primary cause for this year’s permanent closures.

As excerpted from the article: Rite Aid, which has struggled in recent years to compete with larger rivals Walgreens, CVS Health and Walmart pharmacies, on Thursday said it plans to “significantly reduce costs” through a “closure of a total of 145 unprofitable stores.” The number includes the 63 stores the company already announced in December it would close. The disclosure was made as part of the company’s fiscal 2022 fourth quarter earnings report and fiscal 2023 outlook.

Many of the stores have already closed; others will close through the duration of the year.

And one additional point: According to a June, 2022 article from Fortune.com, “Rite Aid Managed to Lose More Than $600 million During the Pandemic While its Pharmacy Rivals Boomed. Inside the CEO’s High-Stakes Turnaround Plan,” the company’s business challenges remain more substantive than previously considered.

From the article: Rite Aid’s financial difficulties are far deeper and more perilous than simply looking puny compared with its competitors. The company is also dragging around $3 billion in debt—one reason that an April Deutsche Bank research note warned that the company was in danger of hitting a “dramatic negative inflection point” where it no longer has the funds to invest in the business. What happens if it reaches that point? A downward spiral that could potentially end in bankruptcy, taking shares from their current $6 or so all the way down to zero.

Conclusion

Though Rite Aide numbers are presently healthy, in such a volatile industry changes happen quickly and frequently with little or no notice.

In the event of further related reportage I will update my readers here, on NewsBreak.

Thank you for reading.

Comments / 17

Published by

I am an award-winning author, screenwriter for film and television, and producer. My mission on News Break is to share socially important perspectives on both culture and pop-culture. Member of PEN America, and the WGA.

Northridge, CA
89171 followers

More from Joel Eisenberg

Comments / 0